Predicted changes in interest rates are imperfectly correlated with actual changes in interest rates. One statistical consequence may be that large predicted changes are more likely to be overestimates than underestimates of the magnitude of the change. If so, the accuracy of predicted interest...

Analysts' earnings forecasts are not perfectly correlated with actual earnings. One statistical consequence is that the most optimistic and most pessimistic forecasts are usually too optimistic and too pessimistic. The forecasts' accuracy can be improved by shrinking them towards the mean....